Roblox shares rocket on earnings beat, strong forecast

roblox Shares rose as much as 20% in extended trading Thursday after the company reported results that beat consensus estimates for the fourth fiscal quarter.

Here’s how the gaming company’s performance compared to the predictions of analysts surveyed by LSEG:

• Loss per share: 48 cents versus 45 cents expected by analysts
• Reservations: $2.22 billion versus $2.05 billion analysts expected

The company said it expects first-quarter bookings to be between $1.69 billion and $1.74 billion, above Wall Street expectations of $1.68 billion.

While Roblox’s fourth-quarter bookings were up 63% year-over-year, the company reported a net loss of $316 million for the quarter; This represents an increase of approximately 44% from the previous year’s $220 million.

The company reported 144 million average daily active users, or DAUs, in the fourth quarter, up 69% year over year. Analysts expected 138 million DAU.

Roblox announced in its letter to shareholders that it no longer plans to issue annual guidance starting in 2027 due to the “natural variability” in the company’s business. Instead, Roblox said it will focus on providing quarterly guidance.

Roblox has faced criticism for putting underage users at risk, and numerous lawsuits have been filed on behalf of children. sexually abused on the gaming platform.

The company said it introduced a mandatory age check for users who want to access communications features in Australia, New Zealand and the Netherlands in late fourth quarter. Roblox said 60% of its daily users in these markets check their age, while 45% of global daily users do so.

Roblox said its age-checking implementation, which was completed globally in January, caused a “mid-single-digit headwind on connection growth and a low-single-digit headwind on booking growth.” But the company added that “strategic leverage is important.”

“Accurate age data unlocks a long-term opportunity to tailor features and content, improving safety and civility, which in turn drives organic engagement growth,” the company wrote.

Roblox said its age check revealed that its user base was younger than its self-reported data indicated. 38% of daily users are between the ages of 13-17, 35% are under 13, and 27% are over 18.

The company said it sees its scale towards younger users as a “valuable strategic asset.”

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